There’s only one thing better than landing a great new client, and that’s the excitement of booking that client for ongoing work. Perpetual projects are often the answer to a freelancer’s feast-or-famine woes, and they’re also the perfect solution for a client who wants to have an expert who’s readily available to provide regular, on-demand services.
In many ways, a retainer agreement bridges the gap between the risks of 1099 work and the restraints of W-2 employment. Here’s how it works.
What Is a Retainer Agreement?
First, here’s a quick definition: The term “retainer” refers to the regular payment from a client to a service provider for the ability to consult with that independent worker on demand. This also applies to freelancers who deliver work consistently over a predetermined course of time, like indy data analysts who query databases each month to present reports to a client’s sales directors, or freelance security experts who run periodic penetration tests to ensure their customers’ sites remain safe from hackers.
The possibilities are as endless as the variety of freelance consultants out there. What all retainer agreements have in common, however, is the creation of an ongoing business relationship.
For you, the most obvious benefits of retainer agreements are stability and long-term client relationships. A guaranteed paycheck is usually the one thing freelancers miss most when they ditch traditional employment to strike out on their own, and retainer agreements ease that pain.
But what’s more interesting are the many ways your clients can benefit from this arrangement, each of which can help you sell the idea to a potential client and improve your future working relationship:
Cost savings: Clients can spend less time, energy and resources onboarding and training new freelancers when they book this indy help in perpetuity.
Inherent trust: Retainers are traditionally paid before work is complete. For example, most freelancers charge on the first of the month for the next 30 days’ worth of work. This sets a tone of mutual trust and respect.
Streamlined communications: Retainer agreements empower you to establish a reputation of being ultra responsive. And a long-term relationship can also teach your client exactly when and how to get an immediate response from you.
Established expectations: In time, your client will learn exactly what to expect from you. This can free them up to manage other projects, instead of micromanaging you.
Peace of mind: In your agreement, you’ll guarantee the quality of your work. If a mistake or vulnerability is found months after your project delivery, a retainer will require you to rectify the situation and salvage your good standing. Clients love the confidence this provides for their own reputations.
Ongoing advisory benefits: If a client just has a question about design, for example, their favorite freelance designer probably comes to mind as an expert who can help. Retainer agreements ensure the client isn’t overreaching on project scope by empowering them to ask their indys basic questions as they pop up.
Tactics for Landing the Right Retainer Clients
Unfortunately, the best retainer clients aren’t as easy to find (or land) as those looking for one-off gigs. But that’s exactly what makes them more fun to pursue.
Here are a few ways you can position yourself to build relationships with leads that are naturally more open to the retainer-style working relationship:
Ensure you’re looking in the right place: Sorry, but the classifieds section of your local newspaper probably won’t have a high saturation of the big-budget clients who appreciate retainer agreements. Instead, try nurturing leads strategically. One way to do this is to support what your target client is already doing. For example, when you see their company share a recent win, celebrate online by commenting on how it will benefit the industry as a whole. This requires more time per lead, of course, but it shows you’re more committed (and educated) than your competitors and their cold pitches.
Make your “recurring package” the most attractive one: Assuming you have a competitive pricing strategy in place, make a few small adjustments so the best value a client could get is not in the highest-priced option, but in the offering with the longest contract duration.
Conduct discovery calls: Speak with your potential client for at least 30 minutes before drafting up a proposal to meet their business needs. If an interested customer doesn’t want to invest this time to determine if you’re a good fit, they may not plan to retain you in an ongoing capacity.
Once you’ve built up the necessary relationship, the best way to start negotiating a retainer agreement is to assume it’s what your client wants and plans to offer you. Use the term “retainer” instead of “contract” when discussing the administration of your invoicing. If your prospect pushes back on this assumption, list the business benefits above — highlighting all the ways their team can prosper by having an expert on demand.
How to Retain That Retainer
Perhaps the only thing more lucrative than landing a retainer client is keeping one. When a retainer agreement is about to expire, compose a progress report that lists the work completed, highlights unexpected achievements and recommends a contract renewal. You’ll get some bonus points if your client contact can use this information to make himself look good, too. Then, simply send the report off to your client with a note that offers continuing benefits.
Not sure how to phrase this particularly tricky correspondence? Here’s a template that can help you get started:
I’ve enjoyed fueling Acme Corp’s online presence through our creative collaborations over the last six months. It’s safe to say we’ve cranked out some catchy campaigns.
I’ve compiled the results we’ve achieved together and attached it here. The dramatic graphs tell their own story, so feel free to share it with the whole group … or even your higher-ups.
One of the unexpected byproducts of our success so far is the momentum propelling us to the next phase of this initiative. In other words, I propose we keep going.
Before our retainer agreement expires, let’s discuss exactly that. Here’s a link to my real-time availability if you’d like to phone in. And if you prefer to review the service plans available, check out my tiered pricing packages.
Here’s to an awesome run, and hopefully many more.
By the time you make it to this stage of the relationship, it’s likely that you’ll have heard the client bemoan his professional pain points over and over again. Use this opportunity to address them now. Offer to do what you can to solve these points in the future, and rework your pricing if necessary to accommodate ongoing solutions.
Together, both you and your client can benefit greatly from the establishment of a retainer agreement — and you’ll be able to rest easy knowing you have a predictable source of income each month.